Apple refreshes, renames iPad as 'Air,' goes Retina on the Mini

Apple today unveiled a revamped and renamed 9.7-in. iPad, calling it the "iPad Air" to reflect its thinner, lighter form and to evoke the thin MacBook Air laptop.

The company also refreshed the iPad Mini, the 7.9-in. tablet it launched a year ago, by adding a higher-resolution 2048 x 1536 display -- dubbed "Retina" by Apple -- and bumping up the price to $399.

Tuesday's event was Apple's first invitation-only presentation to be publicly webcast since October 2012, and just the fourth ever.

"This is the biggest step yet in the iPad ... our biggest leap " Philip Schiller, Apple's head of marketing, boasted about the iPad Air in his second stint on stage during the 80-minute presentation. "It's our biggest leap forward," he added, touting the new tablet's design and component mix.

The iPad Air is 20% thinner than its predecessor, the unnamed "fourth-generation" tablet launched last October, and weighs just one pound, 29% lighter than the previous model. "This makes it the lightest full-sized tablet in the world," said Schiller.

The new-new iPad Air boasts the A7 SoC (system-on-a-chip) -- as most analysts expected, the same that powers the flagship iPhone 5S -- that Schiller trumpeted as a "desktop class" processor for its 64-bit design. "This is a screaming fast iPad," Schiller added.

Carolina Milanesi of Gartner applauded the naming of the newest iPad. "Calling it the fourth- or fifth-generation was just getting too complicated," she said in an interview from Apple's event. "And the Air name makes a great deal of sense. [That name] has been very successful and it evokes a nice companionship with the MacBook Air."

The device itself, she said, had a lot to offer for the price, which Apple kept at $499 for a 16GB Wi-Fi tablet, $629 for one equipped to connect to a mobile network. "There's a lot that they're giving you," she said, ticking off the A7 SoC and its resulting faster performance, as well as the lighter feel in the hand, which she added should not be discounted as a selling point.

Ezra Gottheil from Technology Business Research also gave a nod to the iPad Air, but for a different reason. "I think they really needed to go thinner and lighter," said Gottheil in a telephone interview Tuesday. "Some of the Windows 8 tablets are kind of amazingly thin." And Apple needed to keep up with the Joneses.

The iPad Air will go on sale Friday, Nov. 1. Apple did not say anything about pre-ordering the tablet, an omission similar to that for the iPhone 5S last month, which also was not available for pre-order.

Most of the experts, however, focused on Apple's other tablet segment, the 7.9-in. Mini.

As expected, Apple swapped out the 1024-x-768-pixel screen for one with four times the pixels in the second-generation iPad Mini. The company also inserted the same A7 SoC as in the full-sized iPad Air, a move that Schiller said quadrupled the smaller tablet's overall performance and boosted its graphics performance by eight times.

Apple's new iPad Air (left) is 20% thinner, 29% lighter than its predecessor; the Retina-equipped iPad Mini (right) starts at $399, a 21% increase. (Image: Apple.)

The new Retina iPad Mini will start at $399 with 16GB of storage space, a $70 or 21% increase. The new iPad Mini will go on sale at some point in November -- Schiller did not give a specific date -- hinting at the shortages that analysts had anticipated for the device.

Apple also retained the first-generation iPad Mini in its inventory, but lowered the starting price by 9%, from $329 to $299. Many had bet that the first-generation Mini would be priced even lower, perhaps as low as $249, in an attempt to retain market share in the face of the growing flood of cheaper Android-based tablets, including Google's own Nexus 7, which sells for $229 with 16GB and a 1920-—-1200-pixel screen.

Both Milanesi and Gottheil figured that Apple stuck with the $299 price because it couldn't reduce the cost of materials sufficiently to retain its customary high margins.

"But I think consumers will see the value of the $299 price," said Milanesi. "It's a clear difference [between first-generation and the Retina models], and makes more difference in this world than in smartphones, where carriers subsidize. One hundred dollars does make a difference to those people who are looking for their first iPad."

Gottheil, who had expected a lower price for the first-generation iPad Mini, chided Apple for not rolling the dice and competing in dollars. "It's higher than I thought they would do," Gottheil said. "But I suspect they could not do what they really wanted to do, simply on a cost of goods basis."

The $299 price will give Apple a better chance at competing with Android, specifically the Nexus 7, which Gottheil saw as the benchmark rival. "It's a big issue, I think. It's not low enough to make a huge market impact," said Gottheil. "Somewhere around $249 or $269 would have given them the 'Never mind the other guys' advantage."

Milanesi disagreed. "[The] original iPad mini at $299 with the rich ecosystem will matter more to consumers than [a high-resolution display] on competitors' products similarly priced," she wrote on Twitter during the presentation.

Instead, the experts concurred, Apple again stressed its strategic vision with the pricing of the Retina iPad Mini and last year's tablet. "Apple has decided to pay attention to margin rather than share, and accept that they will lose some share with these prices," said Gottheil. "That's clearly a strategic decision."

Many viewed the pricing of the iPhone 5C in the same light last month. Ben Thompson, an independent analyst based in Taiwan, made that case eloquently, positing that Apple's pricing model for the iPhone 5C was a reaffirmation of the Cupertino, Calif., company's brand positioning rather than, as most others expected, an attempt to go low and grab market share.

So it was today.

"At the end of the day, it's the brand experience that they deliver on top of these devices, the software and services and app innovation, that separates Apple from its competitors," said Thomas Husson, an analyst with Forrester Research, in an interview. "What differentiates Apple in the space is not necessarily hardware innovation, but the value and benefit to consumers of the entire ecosystem. And the pricing today speaks to the premium position that they want to maintain."

Apple also revealed the delivery date of OS X 10.9, aka Mavericks, which it will release today. The upgrade will be free, a first not only for Apple, but also for any major commercial operating system vendor. "Today, we announce a new era," said Craig Federighi, who leads OS X and iOS engineering at Apple and replaced Cook on stage for a few minutes to tout Mavericks. "Free is good."

Apple launched OS X Mavericks today, and for the first time, didn't charge users for the operating system upgrade. (Image: Apple.)

Last year's OS X Mountain Lion upgrade was priced at $19.99, and the year before that Apple sold Lion for $29.99. Speculation about Apple making its Mac operating system free have circulated on occasion, notably in 2012 as rival Microsoft was readying Windows 8.

Federighi cited improvements in battery life -- up to an hour on existing hardware -- memory usage and performance from OS X 10.9, as well as new apps, including iOS' Maps and iBooks, continuing Apple's practice of seeding Macs with software that originated on the iPad or iPhone. "This one's a doozy," said Federighi.

Earlier in the event, Schiller also quickly spun through a refresh of the MacBook Pro notebook line, available today, that incorporate Intel's latest Core processor, code-named "Haswell," to sync the higher-priced laptops with the MacBook Air, which received the same chips this summer.

Apple, like every personal computer maker, has been hit by the slump in sales, and reacted today by lowering prices of the MacBook Pro models by $200. The 13-in. Retina-equipped MacBook Pro now starts at $1,299, a 13% price cut; the 15-in. models now start at $1,999, a 9% discount.

Schiller wrapped up by disclosing the price of the cylindrical Mac Pro, its radically-redesigned power desktop: The system will start at $2,999, and go on sale in December.

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